GyanGramQuestion
Consider the following statements :
1. Inflation benefits the debtors.
2. Inflation benefits the bondholders.
Which of the statements given above is/are correct?
PRELIMS 2013 · INDIAN ECONOMY
Consider the following statements : 1. Inflation benefits the debtors. 2. Inflation benef…
Attempt this previous-year question. The correct option stays hidden until you choose.
Pick an option to check yourself.
• Correct Answer: A
• Inflation erodes the real value of money, allowing debtors to repay loans with cheaper currency.
• Bondholders suffer because fixed coupon payments lose purchasing power and bond prices fall when rates rise.
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